If DXY falls through the midline of the purple channel (96.10) then, sure, GC could complete the IH&S and keep going. But, I think it’s unlikely. I think central bankers are loath to see gold break out, just like they’re loath to see the dollar break down past a certain point.

As it turned out, DXY did fall through 96.10. On Aug 10, GC popped up above a powerful trend line of overhead resistance (below in yellow) that has been confounding gold bulls since Sep 2011. It’s latest affront came on Jun 6, when it presided over a 7.3% month long reversal. Note that it was so strong as to send gold lower even while DXY fell (they are normally negatively correlated.)

As a result, GC finally tagged the .786 Fib at 1323.30. And, each test launch from North Korea and tweet from the White House lavatory sees it tick a little higher.